Supreme Court To Resolve Circuit Split Regarding Attorney-Client Privilege

The United States Supreme Court on October 3 granted certiorari to review a controversial Ninth Circuit decision—In re Grand Jury—that limited attorney-client privilege treatment for communications involving both legal and non-legal purposes, known as “dual-purpose” communications. A decision is expected in the current Supreme Court term, which commenced this month.

The Ninth Circuit held in In re Grand Jury that for a dual-purpose communication be privileged, its primary purpose must have been obtaining or providing legal advice. The Ninth Circuit’s test conflicts with holdings of the D.C. Circuit that privilege attaches where legal advice was a significant purpose of the communication.

The question presented to the Supreme Court for its resolution in In re Grand Jury is whether a dual-purpose communication is protected by the attorney-client privilege where obtaining or providing legal advice was “one of the significant purposes” of the communication.

Dual-Purpose Communications

Dual-purpose communications have mixed legal and business purposes. For example, the communication may provide confidential information for purposes of obtaining legal advice or to assist the attorney in providing legal advice. At the same time, the communication may provide information for the purpose of obtaining non-legal advice from the attorney. The attorney, in response, may provide both legal and non-legal advice.

Dual-purpose communications are common in American business, particularly in communications with in-house counsel, but also in communications with outside counsel. In-house counsel usually have business responsibilities, often have non-legal titles in addition to their legal titles, and frequently contribute to business decisions. Outside counsel also may be asked to provide advice that is not strictly legal.

Conflicting Privilege Tests

It is important for businesses to know with reasonable certainty whether communications with legal counsel will be protected by the attorney-client privilege. Due to the conflicting privilege tests that currently exist in different circuits, uncertainty prevails. Moreover, the “primary purpose” test that the Ninth Circuit adopted is particularly problematic.

The Ninth Circuit adopted the primary purpose test in In re Grand Jury in September 2021.The test requires the privilege claimant to establish that the primary purpose of the communication was legal. It has been criticized for, among other things, being impractical and unrealistic, because discerning whether the legal or the business purpose was the primary purpose erroneously presumes that all communications have a single, predominant purpose. Finding such a single, predominant purpose is often impossible and is usually a futile exercise in conjecture. It thus guarantees excessive disputes over privilege requiring court resolution.

In contrast with the Ninth Circuit, the D.C. Circuit in In re Kellogg Brown & Root, Inc. in 2014 adopted a test for dual-purpose communications that determines whether the communication had a “significant legal purpose” without considering the relative importance of any business or non-legal purpose. It reaffirmed that test in Fed. Trade Comm'n v. Boehringer Ingelheim Pharms., Inc. in 2018. Then Circuit Judge (now Supreme Court Justice) Kavanaugh authored both decisions.

By granting certiorari in In re Grand Jury, the Supreme Court now has the opportunity to resolve the circuit split and to establish a uniform, predictable privilege test for dual-purpose communications.

Adopting The “Significant Legal Purpose” Test

That Justice Kavanaugh authored the D.C. Circuit opinions adopting the significant legal purpose test may foreshadow the likely outcome of the case. Moreover, the significant legal purpose test is more easily and predictably applied in that it requires assessing only whether the legal purpose was one of the significant or important purposes of the communication.

The inquiry is straight-forward: Did the communication seek legal advice from an attorney, provide confidential information to obtain that advice, or provide legal advice, and was that a significant purpose of the communication? Weighing the relative significance of any business or other non-legal advice that also may have been sought or provided is not an element of that inquiry.

The significant legal purpose test should be objective. Would a reasonable attorney, based on the facts and the issues raised, require the information in order to render legal advice or services or consider the communication a request for legal advice and services? Would a reasonable recipient of an attorney’s communication consider the advice rendered to be legal advice? Additionally, the significant legal purpose test furthers the purpose of the attorney-client privilege to encourage communications and information sharing to obtain and provide fully informed legal advice, analysis, and services.

Two potential concerns have been raised regarding the significant legal purpose test. The first concern is that otherwise discoverable communications that are primarily for business purposes will be withheld because they also have a legal purpose. Business decisions and actions, however, will likely be otherwise disclosed in non-privileged communications or will be discoverable by deposition or interrogatories.

A second concern is that non-legal communications that are merely copied to an attorney will be claimed privileged. That is an issue that exists regardless of the privilege test that applies. Additionally, the significant legal purpose test does not change the burden of establishing the privilege, which remains fully on the party making the claim and thus mitigates the risk that courtesy copies merely to keep counsel informed will be withheld on privilege grounds.

As stated in the concurring opinion in the D.C. Circuit’s Boehringer case, where a communication has a legal purpose as well as a business purpose, the privilege claimant must still establish to a “reasonable certainty” that “obtaining or providing legal advice was one of the significant purposes” of the communication.

Thus, the Supreme Court has the opportunity in In re Grand Jury to resolve the circuit split, to provide a clearer standard for asserting and assessing privilege claims, and to reduce the number of disputes that arise over whether a dual-purpose communication is privileged.

Gareth T. Evans is a partner at Redgrave LLP and is an eDiscovery litigator and advisor who is passionate about information law and collaborates with clients to identify and achieve their business goals.

Ted S. Hiser, senior counsel at Redgrave LLP, has represented clients in complex litigation and investigations and advises clients on eDiscovery and attorney-client privilege and work product issues.

The views expressed in this article are those of the authors and not necessarily those of Redgrave LLP or its clients.